(Adds central bank chief’s comments, background, details)
By Alonso Soto
RIO DE JANEIRO, May 16 (Reuters) - Chile’s economy likely grew by 2.5 percent in the January-to-March period compared with a year earlier, the country’s central bank chief said on Friday at a central bankers’ seminar in Rio de Janeiro.
That would be the weakest pace of quarterly growth for the economy of the world’s top copper producer since the first quarter of 2010, when it was hit by a massive earthquake.
“We don’t have yet the (GDP) figures for the first quarter of this year, but it is going to be about 2.5 percent,” said central banker Rodrigo Vergara on Friday.
The central bank will publish the gross domestic product data early on Monday. Last year, Chile’s economy grew 4.1 percent.
The IMACEC economic activity index, encompassing about 90 percent of the economy tallied in gross domestic product figures, grew 2.4 percent in the first quarter compared with a year earlier, data showed earlier this month
After a recent spike in consumer prices pushed annual inflation above the bank’s stated 2 percent to 4 percent tolerance range, the bank opted to keep its key interest rate on hold at 4.0 percent for a second consecutive month late Thursday, despite the slowing pace of growth.
The bank still expected inflation to end below 4 percent by year-end, Vergara said on Friday.
“This is definitely an issue that has concerned us, although the pass-through we still think is lower than in the past,” he said. “Although we still think that this is transitory, the inflation rate of the past three and four months has surprised us.”
The bank’s last official forecast, from its March 31 quarterly Monetary Policy Report, said inflation would likely end the year around 3 percent.
A sharp depreciation of Chile’s peso - it has weakened nearly 4.5 percent against the U.S. dollar so far this year following 2013’s drop of 9 percent - has made imported goods more expensive, driving prices higher. (Reporting by Alonso Soto, writing by Anthony Esposito; editing by G Crosse and Chizu Nomiyama)